Business Exit Planning: Every Owner Exits, So Plan for It Now
- The exit is not optional: Every owner leaves their business eventually. The only choice is whether that exit happens on your terms or on the terms of burnout, health, or bad timing.
- Run the company in chapters: M&A advisor Brian Franco recommends treating your business as a series of five-to-seven-year chapters, each one built with a clear outcome in mind.
- Buyers pay for predictability: Cash flow that comes from systems, KPIs and accountability is what makes a company valuable, whether you sell it, pass it down, or keep it forever.
Most home service owners do not start a company thinking about how they will leave it. You start because you can sell, because you see a gap in the market, or because you are tired of building someone else's dream. Ten years later, the trucks are on the road, the team is bigger than you ever planned, and a quiet question starts showing up: now what?
That question is where exit planning begins. On a recent episode of the CEO Roundtable, Sam Taggart sat down with Brian Franco, founder of Meritage Partners and author of The Inevitable Exit. Brian got into M&A at 24, founded his Newport Beach advisory firm at 26, and has since led hundreds of acquisitions worth more than $2.4 billion, including 21 companies taken public.
His core message is simple and a little uncomfortable. You are going to exit your business. Everyone does. The owners who plan for it build more valuable companies and keep their options open. The ones who don't often watch years of work lose its value right in front of them.
Why Every Business Owner Eventually Exits
The Story Behind "The Inevitable Exit"
Brian did not come to this idea through a spreadsheet. He came to it through his father.
His father built a successful business with major contracts, including work for Waste Management and FedEx. When Brian was about 17, his father needed two back fusions after getting hurt on the job. Today he is permanently disabled, mostly in bed, and when he does walk he uses a cane or a wheelchair. With no plan for what would happen if he could no longer run the company, the business slowly deteriorated until it had to close.
Brian estimates that his father's company would be worth more than $30 million today if it had been planned around that inevitable exit. That gap between what the business was and what it could have become is a big part of the inspiration behind the book.
"What you do not resolve today, you're gonna pass down those problems to your kids."
"I'm Never Selling" Is Still an Exit Plan
A lot of owners push back on exit planning because they have no intention of selling. They plan to run the company until they can't, or they plan to hand it to their kids.
Brian's point is that both of those are exits too. Handing a company to the next generation is a transfer of ownership, and the numbers on those transfers are rough. Brian shared that second-generation businesses fail at a rate of roughly 60 to 65 percent, and by the fourth generation the success rate drops to single digits. He is currently working with a centennial client, a 100-year-old business in its fourth generation, which shows it can be done. It just does not happen by accident.
If you are not planning the exit, you are not avoiding it. You are simply letting circumstances plan it for you.
Run Your Business in Five-to-Seven-Year Chapters
The Paradigm Shift That Changed How Sam Runs His Companies
Sam called The Inevitable Exit an easy read, and one that changed his entire paradigm for running his businesses. The shift is this: stop thinking of the company as one long, open-ended job and start thinking of it in chapters.
Each chapter runs about five to seven years. At the start of each one, you ask what outcome you want at the end of it. Maybe it is a sale. Maybe it is bringing in a partner, stepping out of daily operations, or building a leadership team strong enough that you could leave for six months without anything breaking.
When you work this way, the business stops being only an income generator and becomes an asset you are building toward a specific outcome. That change in perspective affects everything from who you hire to how you track your numbers.
Your Interests Will Change, and That's Normal
Sam pointed out that what interested him ten years ago is very different from what interests him today. Markets change as well. Sam gave the example of a software company that swore it was never selling, then got disrupted by AI and wished it had sold three years earlier.
Brian describes entrepreneurs as fixers. We like to solve problems, and when there are no problems left, some owners will create new ones just to have something to fix. He calls people like Sam and himself "foreverpreneurs," people who will always be building something. Planning your exit is not about quitting entrepreneurship. It is about making sure your current company does not trap you when your next chapter shows up.
What Buyers Actually Pay For
Predictable, Sustainable Cash Flow
Brian's point is that buyers are buying cash flow, and the burden of proof is on the seller's side of the table. Is it sustainable? Is the revenue predictable?
Buyers want cash flow, and they want confidence that the cash flow will continue after the founder steps back. That confidence comes from systems, KPIs and accountability. It is the difference between a company that runs on the owner's personal hustle and one that runs on a process anyone can see and measure.
Brian used door-to-door sales as an example. No single sale is predictable, but the math is. If you know your hit rate and win rate, and how many doors your team has to knock to close a deal, revenue becomes mathematically predictable. That same logic applies across the whole business, from lead flow to install times to collections.
This is exactly why owners who build an operating system, with a weekly scorecard, clear accountability and documented processes, tend to get stronger outcomes when they eventually sell. If you are not sure how your company would look to a buyer today, a free business audit is a quick way to find the gaps.
What Institutional Buyers Expect
Brian also gave Sam a lightbulb moment about his roofing roll-up, Forge. Sam's original plan was to build the platform and sell for more than $200 million, skipping the middle of the market.
Brian pointed out that most of the transactions Sam had been studying were in the $10 million to $40 million range. Institutional buyers writing $200 million checks expect a lot more. They expect you to have already made some bigger moves, like W-2 employment and real integration across the companies. A $200 million deal is not a $30 million acquisition where the buyer bolts a company on, fires the CEO and says jump into our platform.
Sam's reaction was honest: "We didn't think of that." His whole thesis shifted. The lesson for every owner is that the size of the check you want determines the standard of business you need to build.
Optionality Is the Real Goal
Four Reasons the Exit Shows Up Early
Brian's key word is optionality. You want the ability to choose your next move instead of having it chosen for you. He listed four reasons owners often exit sooner than they expect:
- Burnout: Years of carrying every decision eventually wears owners down.
- Health: Brian has closed deals where the owners did not know their business was sold because they have Alzheimer's.
- Premature death: Brian's firm sold the business of a 50-year-old man who died prematurely of a heart attack.
- Outgrowing your capability: Running a $20 million company is a different job from running a $100 million company, and many founders have never done it.
Preparing for the exit prepares you for all four. And as Brian put it, the natural result of that work is a better company and a more valuable company, whether or not you ever sell.
"What Do You Want to Exit Into?"
The most powerful question from the episode came from Brian: what do you want to exit into?
Sam described a prospect who flew in from Ohio to look at Forge. He owns a $35 million roofing company, has spent 17 years grinding, and is exhausted. He is spending about $3,000 a month per market on recruiting and around $10,000 on Google Ads, and he is tired of managing all of it himself. What he really wants is partners who can take over shared services like marketing and recruiting so he can focus on what he does best: building and having strategic conversations.
When Sam asked about his hobbies, the owner said he just works. Then he said he wanted to sell and retire by 40. Sam pointed out the contradiction. As Brian put it, borrowing a line someone once told him, "Being an entrepreneur is not a career, it's a condition."
Brian Franco: "You wanna exit, but what do you wanna exit into?"
Brian Franco: "What do you want to do? And for some people, yes, that's retirement."
Selling Doesn't Have to Mean Leaving
A Roofing Owner Who Sold and Kept Growing
Sam raised a point that surprises many owners: you do not have to leave your company when you sell your company.
Brian shared the story of a roofing client in St. Louis who sold for $15 million to a private equity group. The group brought capital. That owner's division is on track to do $40 million this year, and the overall platform is on track for $35 million of EBITDA. Because the owner rolled equity forward, he shares in that growth.
When the day-to-day pressures come off, Brian says, owners think differently. As Sam put it, most are just trying to survive and hit payroll. Brian believes that once the Ohio owner is freed of that weight, he will transform into something he has never seen in himself. Another of Brian's clients summed it up in a meeting with buyers and investors: "I'm not looking for a job, I'm looking for a challenge."
Dating, Engagement and the Wedding Day
Brian compared a transaction to a marriage. There is dating, then you get engaged when you sign a letter of intent, and then there is the wedding date. You cannot fully explain marriage to someone until they are married, and you cannot fully explain life after a transaction until an owner is on the other side of it.
For roofing owners specifically, that is a big part of what Sam is building at Forge Strategic Equity: a way to partner, grow and keep a seat at the table rather than simply cashing out and walking away.
How to Start Your Exit Plan This Quarter
You do not need a buyer, a banker or a date on the calendar to start. You need clarity and systems. Here is where to begin:
- Define your current chapter. Write down where you want the company to be in five to seven years and what outcome you want at the end of that chapter.
- Answer the "exit into" question. Decide what your role looks like after a transaction, even if one is years away.
- Make revenue predictable. Track your core numbers weekly so you can show, not just claim, how the business performs.
- Remove yourself as the bottleneck. Document the processes that only live in your head and build a leadership team that owns outcomes.
- Stress-test the business. Ask what would happen if you were out for 90 days. Whatever breaks is the first thing to fix.
Frequently Asked Questions
What is business exit planning?
Business exit planning is the process of deciding how and when you will leave your company, and then building the business so that exit creates the most value. It covers selling to a buyer, bringing in a partner, passing the business to family or stepping out of operations while keeping ownership.
When should I start planning my exit?
Now. Brian Franco recommends running your business in five-to-seven-year chapters with the exit in mind. The work that prepares you to exit, such as systems, KPIs and a strong leadership team, also creates a better, more valuable company while you own it.
Why do family business transfers fail so often?
According to Brian, second-generation businesses fail at a rate of roughly 60 to 65 percent, and fourth-generation success rates are in single digits. Brian's warning is that problems the founder never resolves get passed down along with the business.
Do I have to leave my company if I sell it?
No. Brian said most owners whose deals he closes end up re-energized rather than retired. His St. Louis roofing client sold for $15 million, rolled equity forward, and his division is on track to do $40 million this year inside a larger platform.
Conclusion
The exit is coming whether you plan for it or not. Brian Franco watched his father's business lose what could have been more than $30 million in value because no one planned for the day he could not run it. You do not have to repeat that story.
Treat your company as a series of chapters. Build revenue that is predictable because it runs on systems, not on you. And answer the question that matters most: what do you want to exit into? Owners who do this work end up with options. Owners who don't end up with whatever is left.
